Gov. Dave Heineman said Tuesday evening the legislature could cut between $370-and-500 million in taxes without harming state services.

Heineman gave a preview of his State of the State address to the Unicameral during an evening news conference held in his Capitol office.

The State of the State address will be delivered to the Unicameral Wednesday morning.

In the news conference, Heineman again stated his contention that tax relief should be the top issue of this legislative session. While the governor outlined no specific tax cut proposal, he detailed how the legislature could use a portion of the state cash reserve and squeeze enough savings over the next three years to cut taxes.

The state cash reserve has been growing of late, bouncing back from the 2008 recession. It is estimated to total $722 million.

Heineman stated the legislature could take $220 million from the cash reserve and still have half a billion dollars left, more than enough he said to carry the state through a downturn in revenue. The governor said lawmakers shouldn’t be squeamish about such as reduction.

“That is more than sufficient,” Heineman said of a $500 million cash reserve. “We now have the largest cash reserve that we’ve ever had and if you want to try to think of an excuse not to do tax relief that will be one I will hear fairly frequently.”

Heineman insisted his plan would not place the state in fiscal jeopardy.

“We have gone through a downturn several years ago. We had $500 million, which was more than sufficient,” Heineman stated. “We used it. I don’t believe we ever got below $200 million in the cash reserve. We are sitting on a bundle of cash. We are overtaxing our citizens right now and they deserve some of it back.”

Heineman gave little specifics on what type of tax cut he would prefer, except to say that it should be a combination of property and income tax relief. He did advocate for a reduction in the assessed valuation of farmland, from the current 75% to 65% of market value. Heineman said that an increase in the value of agricultural land has driven property tax bills for farmers to record highs.

Other than that, Heineman insisted he is open to suggestions from lawmakers.

“There are a number of things you can do, ok? All those issues ought to be up for discussion,” Heineman said. “What I’m trying to say to everyone is we’ve got plenty of room to do tax relief, still fund the services of government and let’s sit down and talk about it; lowering the rates, adjusting the brackets, indexing, the ag land value situation, a whole series of issues.”